CaliforniaCityNews.org

Financial Hardship Tests Local Control in Michigan as Emergency Managers Take the Reins

There’s no shortage of drama in the state of Michigan over the fate of municipal authority in several distressed cities, with Detroit featuring most prominently in the latest headlines. Critics contend the issues posed by a controversial emergency-manager law speak to not only the rights of local governments but democracy itself. We’ve relayed previously that around a year ago the state of Michigan approved a new law that gave Emergency Financial Managers (EFM) greater power over the decisions of local officials. Known as a “financial martial law,” state auditors are able to void municipalities' union contracts and even dissolve local jurisdictions. Detroit is currently mired in intense financial scrutiny that could lead to the appointment of an EFM.

Essentially, emergency managers have increased authority when it comes to overseeing cities that are struggling financially, and the ability to remove elected officials and void contracts has been a troubling development for local governments. While the legislation’s effects on collective bargaining rights have already gained plenty of attention, the attack on local control is especially noteworthy for municipal officials around the country, as Michigan has proven to be a high-profile testing ground of sorts in light of its severe economic woes.

A recent and preliminary review of Detroit’s books led the Treasury to conclude the city is facing “probable financial stress.” A 10-member financial review team has now been compiled to take a closer look at the city’s finances. The financial review team is the next step in the process of possibly appointing an Emergency Manager to run Detroit. It is believed that the city’s budgetary shortfalls could lead to a negative cash balance as early as April.

Detroit Mayor Dave Bing and the City Council are attempting to negotiate with labor unions in order to secure major concessions so that the city can save more than $100 million a year. In the meantime, Rev. Jesse Jackson and a collation of pastors, civil-rights leaders and elected officials have joined together to fight the possibility of an EFM appointment and they have even compared the state-appointed officials to “dictators.”

Michigan Governor Rick Snyder has defended the law and posited that its intent is not to see cities end up in financial receivership; rather, Snyder says the law creates an early warning system complete with extensive reviews so that financial receivership can be avoided. Snyder and state officials are pointing to the fact that one of the five local governments under emergency managers will emerge from receivership in 2012.

The law is facing a court challenge and a referendum petition drive. Among the concerns driving the backlash are questions about whether a financial martial law violates the will of voters by giving one person from outside the community control over its fate. Michigan is a state to keep an eye on as the battle over local control in distressing economic times takes shape.

Santa Clarita, Fairfield, and Livingston Profiles Join the Strong Cities, Strong State Campaign

The Strong Cities, Strong State campaign is rolling right along and next up is the city of Santa Clarita. This city is the fourth largest in Los Angeles County with a population of about 177,000 and is the 24th largest city in the State of California. It is a premier community for raising families and building businesses. Santa Clarita is comprised of four distinct communities, which include Canyon Country, Newhall, Saugus, and Valencia. Since the City’s inception, Santa Clarita has made a name for itself as a community offering an unmatched quality of life. In 2008, the Los Angeles County Economic Development Corporation (LAEDC) named Santa Clarita the “Most Business Friendly City in Los Angeles County.” Success stories include:

• Public Libraries: Santa Clarita’s creation of the Santa Clarita Public Libraries made national headlines in 2011 when the City opened the doors to three new City-run libraries. Patrons benefitted from a $900,000 infusion of books and media, increased library hours and enjoyed new technology.
• Safety: In 2011, Santa Clarita saw its lowest crime rate in the history of the City, with a double digit reduction in part one crimes.
• 100% Track Record for Budgets: Every year since the City of Santa Clarita’s inception in 1987, it has produced an on-time and balanced budget. Santa Clarita’s 15% reserve fund, strong investment portfolio and low debt ratio didn’t happen by accident.

Read more, see photos, and connect with the city here.

Next up is Fairfield, where small town values remain. It’s not just an attractive, tree-lined, bedroom community serving the San Francisco and Sacramento metropolitan areas. Its strategic location, extensive transportation networks, readily-available and value-priced properties, and proximity to Northern California’s attractions make Fairfield a prime location. Success stories include:

• Police Activities League: The Fairfield Police Activities League (PAL) at the Matt Garcia Youth Center has experienced incredible growth--from the numbers of students served every day to the programs and events that are offered
• Priority Based Budgeting: Used to guide the setting of its financial priorities, the city cut its deficit by applying public input, experience, judgment, and best practices

Read more, see photos, and connect with the city here.

Another new edition is the city of Livingston. Located in the center of the San Joaquin Valley in the northern part of Merced County, this City was incorporated September 11, 1922 and as of January 1, 2011, is home to 13,266 residents. An agriculturally rich community, Livingston is specifically distinguished for its grape, dairy, poultry, almonds, and sweet potato production. Major employers and national branded companies, E&J Gallo Winery, Joseph Farms Dairy, Foster Farms, and Cal-Nut have grape pressing, dairy, poultry, and nut plants in or near Livingston. Success stories include:

• Max Foster Sports Complex: In October 2011, work began on a new state-of-the-art 40’ x 60’ picnic structure with restrooms, covered patio, BBQs, and a playground. The structure, close to parking and soccer fields, is just the latest addition to the rapidly growing and well-used Max Foster Sports Complex.
• Joseph Gallo Park: This area sat like a square pothole in a deserted road until 2009 when K. Hovnanian Homes made the brave decision to finish building 47 new homes and complete its Parkside Subdivision.
• Memorial Park: The heart of the community, whether it’s an 80th birthday party, 30th high school reunion, or a city-wide 4th of July event, Memorial Park and its facilities draw people into the heart of Livingston.

Read more, see photos, and connect with the city here.

Fremont Mayor Bob Wasserman Passes Away at Age 77

Sad news in the city of Fremont as Mayor Bob Wasserman recently passed away at the age of 77. The official has been mayor since 2004 and was a councilman for the past 20 years. Prior to his election, he served as the city’s police chief. He had a 40-year career in law enforcement that included appointments in Southern California and a term as the president of California Peace Officers' Association.

Wasserman died at the Fremont Kaiser facility in the presence of his family on December 29th. The Argus reports that “In 2008, he was diagnosed with pneumonia for the second time in three years, and since then he often brought an oxygen tank to council meetings. He had been hospitalized for respiratory problems before he died.”

Vice Mayor Anu Natarajan commented, “Mayor Wasserman served the residents of Fremont for 35 years with distinction and dedication. On behalf of the City Council, I offer heartfelt condolences to the Wasserman family.”

Council member Natarajan will take on the duties of mayor for up to 60 days until the City Council has made a decision on filling the mayoral vacancy.

The mayor is survived by his wife Linda and their two children, Dan and Jill. More about his life and public service here.

Update: A memorial service will be held on Monday. See here.

LA Times a Defender of Vernon? Editorial Argues Against $60 Million Payoff for Nearby Cities

It would be tough to argue that anyone has been as dogmatic and full of scrutiny as the LA Times in the past two years when it comes to covering local government scandals. The paper has been relentless in its coverage of compensation, Bell, Vernon, and Montebello, to name a few prominent examples. This year the involuntary disincorporation of the city of Vernon undoubtedly grabbed plenty of attention, and while the effort was strongly beaten back, receiving far less attention was a ransom payment of sorts from the city of Vernon. Officials in Vernon agreed to pay $60 million to fund community projects in neighboring cities as part of a deal in order to avoid disincorporation. The large sum of money has the city’s substantial business interests worried, as there are concerns about the sum of money Vernon has to dish out.

While Vernon agreed to the payment, is it fair for one city to pay so much to benefit the conditions of nearby cities? In an editorial, the LA Times argues no. State Sen. Kevin De Leon has posited the $60 million will mitigate years of pollution, traffic and other problems caused by Vernon's factories; however, the Times argues the following in an excerpt from its editorial:

“Though Vernon does welcome dirty industries, those businesses must abide by the same state and federal environmental measures as any other companies in California; if they fail to do so, neighboring cities have every right to call in the environmental cops. Similarly, if Vernon creates an illegal public nuisance in its region of southeastern Los Angeles County, other cities can seek redress in the courts.

Vernon is an easy city to dislike, incorporated from the start to draw industry and enrich the local landowners. But if it doesn't break the law, it doesn't owe its neighbors money and shouldn't have been singled out for disincorporation by legislative leaders.

Right now, Vernon's debts might make the $60-million difficult to pay. That's Vernon's problem; it agreed to the deal and must fulfill the terms. But as reviled as Vernon is, other California cities should be contemplating this situation with concern. If Vernon can be pushed into an expensive deal because it has money and tends to rile people, which city might be next?”

Good Signs: State’s Unemployment Rate Drops Again; New Labor Force Data

Inch-by-inch, economic reports on the state of California are improving—ever so slightly. The Employment Development Department has released its latest figures, which show 6,600 new jobs were added during the month of November. Consequently, the unemployment rate now stands at 11.3%, thereby making November the fourth straight month in which the jobless rate has declines. In October it was at 11.7%. The latest rate is the best the state has experienced since the worst of the recession dealt California (and the nation) a blow back in 2009 and now the country’s overall unemployment rate stands at 8.6 percent.

Since 2011, the state has added a total of 211,400 jobs. The LA Times reports on the following additional details about the report:

“Similar drops were registered in major regions: Los Angeles County is down to 11.9% from 13% a year ago; Riverside-San Bernardino counties to 12.5% from 14.5% a year ago; Orange County to 8.1% from 9.4% a year ago; and Ventura County to 9.5% from 10.9% a year ago. While economists caution that some of the improvement in the November numbers could be caused by people giving up on job searches, they point to the last two weeks' decline in the number of people putting in first-time claims for unemployment insurance benefits as a positive sign that a sustained recovery is underway.”

You can find unemployment rates and job figures for each of the state’s 58 counties on page 4 of this report.

Escondido City Council to Forego 15 Percent Pay Raise; To Pay Higher Pension Contributions

Escondido’s City Council recently rejected an opportunity to give itself a 15 percent pay raise in light of struggles associated with the city’s tight budget. The council agreed that it would continue to fall under the terms of a 3 percent compensation cut that the council voluntarily imposed over the summer.

The council will also lose the following benefit: a $300 yearly stipend for medical exams. In addition, council members will also pay the full portion of the employee contribution to their pension plans. Previously they were paying three percent of their salary toward benefits.

The council has brought down the hammer on cuts to keep things equal so that similar compensation reductions can be secured from city workers; however, so far a deal has not been reached with public safety officials.

Mayor Sam Abed commented, “We are trying to be in line with the rest of the city employees. We're treating ourselves the same as everyone else.”

The Escondido Council has not given itself a raise since 2008, which is why it was eligible for a 15 percent bump this December. Council members receive $27,663 per year and 9,000 per year for auto expenses. The North County Times points out that “Council members did agree to increase their base pay 6 percent, but said their overall compensation would not change,” as higher pension contributions will negate any increase.

Holding up the ‘Keep Out’ Signs: Health Nuts in Loma Linda Riled over McDonald’s Vote

Residents in the city of Loma Linda have made it clear that they don’t take too kindly to strangers in these parts—that is, strangers being defined as fast food restaurants that jeopardize the healthy lifestyle strongly cultivated by locals.

Caught in the middle is the city council. Budget woes and difficulty attracting big businesses have made life difficult for officials who have worked hard to attract new development, so when the council recently approved the city’s first McDonald’s, many residents didn’t hide their displeasure. Residents clearly feel a sense of civic pride about being healthy and there are many vegetarians in the city. Notably, Loma Linda residents typically have very long life-spans, especially in comparison to many cities, such as nearby San Bernardino.

It’s not clear how strong the blowback to the McDonald’s vote will play out, but many residents have already suggested running with a ballot measure to ban all fast food in the city. Some residents see the invasion of McDonalds as a threat to the city’s status as a “Blue Zone,” which is worldwide recognition of the longevity of locals.

The Contra Costa Times reports on the council’s decision:

“’We're not approving a McDonald's - we're approving a business that any restaurant could occupy,’ Mayor Rhodes Rigsby said, noting the city had strict guidelines for development and the applicant had followed them. ‘Nobody wants to have to go through all of these steps and then at the final step find out this is a capricious government.’”

Event the New York Times has given the city coverage, which can be seen here.

Life Off the Grid: Displaced Americans Find a Home in Desolate Desert Known as Slab City

Life off the grid takes on a new meaning in the stretch of desert land known as “Slab City.” There are no municipal services, no streetlights, no water or sewage service, no rent and no fees, but it is home to several hundreds of people who have left their lives behind to take up residence in what could aptly be described as a shantytown. The effects of the recession are partially to blame as one reason people move to this desolate area, as they simply can’t afford to go elsewhere and Slab City provides a community of sorts. Tents, trailers, aging mobile homes and other ad hoc dwellings are dispersed over 600 acres and while US Postal Service won’t deliver, there is internet and cell phone service available. The LA Times points out:

“To the west is Niland (population 1,100) and the Salton Sea. To the east is the Coachella Canal (ripe with catfish) and the Chocolate Mountain Aerial Gunnery Range used by the Navy. During World War II, the Slab City site was Camp Dunlap, a Marine artillery training base. But ownership of the acreage passed to the state in the 1950s. Even when it had money, the state government never showed much interest in Slab City. A plan to sell the site to a San Diego developer in the 1990s fell through; so did an idea by Imperial County to turn it into an RV camping ground.”

Local law enforcement in Imperial County has indicated that the tent city doesn’t require much attention and that people who live in the region just want to be unencumbered by the trappings of modern life and make due with the little they have.

CBS News filed the following report:

Controller Announces He will Keep Pushing for Expanded Auditing Authority; $3 Billion in Findings

At any given point during the year, the State Controller’s Office is typically conducting 200 to 300 different audits, and local governments have been no stranger to these efforts and increased scrutiny. In fact, since taking office in 2007, the controller’s audit findings through State and local investigations have now totaled more than $3 billion, which is more than any other Controller in recorded State history.

State Controller John Chiang commented the following about the work of his office:

“Unchecked spending is an invitation for misspending. My audits offer an inside-look at state and local checkbooks, and show us where fiscal practices need serious improvement. These findings can lead to real taxpayer savings, and every dollar rescued is one that we don’t have to take away from education, public safety, or other essential services.”

Prominent audit findings at the local level and beyond include:

Bell: Illegal Property Taxes and Unlawful Spending
Hercules: Currently being audited
Montebello: No-bid contracts and lax spending controls
You can find a list of the Controller’s audits of state and local agencies here.
Revenue Audits can be seen here.
Oversight of Independent Auditor Findings of Education and Local Government Agencies: see here.
More here.

Notably, the controller used the announcement about his overall audit findings to note that he would continue to push for expanded authority. Chiang’s press release states the following: “The Controller's office was flooded with requests audits of more than 200 local governments across California. In order to meet those demands and better protect taxpayer dollars at the local level, the Controller introduced legislation to broaden his office's auditing abilities. While those bills stalled in the last legislation session, the Controller will continue to push to expand his office's ability to protect taxpayer dollars through financial audits.”

Reshaping Local Politics: Redistricting Commission Chairman Yao to Speak at LA Division Event

Still trying to get your head around the political implications of redistricting? Then join the Los Angeles Division of the League of CA Cities for an informative event featuring guest speakers from the California Redistricting Commission. Specifically, Chairman Peter Yao and Commissioner Jeanne Raya will join the Division on January 5th to share their views and first-hand accounts of how the redistricting process will shape local and state politics now and in the years to come. This will be the Division's first meeting of 2012.

Interested in attending? Then register now. You can do so here. For more information, contact Robb at robb@lacities.org.

Speaking of redistricting, nearly 4 million Californians will be without representation in the Senate thanks to a quirky byproduct of redistricting and the Senate's election schedule. While these residents will lack a senator in 2013 and 2014, many areas will have double representation. In response, the OC Register reports that Paul Glaab, mayor of Laguna Niguel, commented the following: “To me, that's an anomaly that probably should be corrected.” Mayor Glabb’s city will be affected by the lack of representation. For more on the issue, see here.